The invention relates generally to credit lending strategies and decision processes and more particularly to an improved method and apparatus for obtaining, organizing, and analyzing internal customer credit data and external consumer credit data.
Typically, banks and other lending institutions have access to different independent sources of consumer credit information. The first source of information are Consumer Reporting Agencies (CRA's) that gather and sell consumer credit information to lending institutions so that these lending institutions can make rational decisions as to the credit worthiness of a particular prospective borrower. Most lending institutions report the credit activity of their customers to a CRA such that the CRA can accumulate and maintain a data base of the borrowing/credit history for individual borrowers. The most common type of CRA is the credit bureau. The Fair Credit Reporting Act (FCRA), enforced by the Federal Trade Commission, is designed to promote accuracy and ensure the privacy of the information used in consumer reports. The information reported by the CRA's, called a consumer report, contains data that is maintained and reported as it relates to a particular individual consumer. Lending institutions use the information in the consumer reports to make a risk assessment regarding the extension of credit and/or the lending of money to an individual consumer.
Other data that a lending institution has access to is the institution's own customer information. For example, a lending institution such as a bank will have a wide variety of customer data on all of its banking customers such as the customer's type and size of accounts, borrowing and credit history, banking behavior patterns and the like. This data, while detailed, is limited to individuals that have an existing relationship with the institution.
The lending institutions also have access to publicly available data such as reports issued by the government. This data tends to be very high level and is accurate only at a very gross level. Moreover, because this data is available to everyone, it does not offer a competitive advantage to any one lending institution.
Thus, a tool for analyzing the consumer credit market that is accurate, scalable, predictive and specifically tailored to the needs of the institution is desired.